In my last post, I covered the history of iNames to demonstrate how hard it is to create internet-wide standards and how important it is for them to be absolutely open. In this post, I want to explain the business model behind iNames. I’m doing this for two reasons:
1. Finding business models for identity products is REALLY hard.
2. If you ever think of getting an iName, this stuff is pretty confusing.
If you’ve read my previous posts, you should have a basic understanding of XRI/XDI (the technology behind iNames) and know that it is now an “open” standard. But what does that mean? A few things:
1. The XRI/XDI specifications are managed by their respective Oasis (the XML standards body) technical committees.
2. The patents that govern the technology have been licensed exclusively to XDI.org, a non-profit public trust organization.
3. Anyone can implement the technologies for any purpose without the prior consent of XDI.org.
So how does Cordance, the company that bequeathed the patents to XDI.org ever hope to make any money (which if you refer to the companies history has been a pressing issue for some time)? Well as part of the bargain for handing over the rights to the XRI/XDI technologies, Cordant was granted the right of first refusal to be the GSP (Global Service Provider) for any Global Services XDI.org might want to offer for the first 15 years after the Global Registry Service went live (2005). Let me attempt to unpack this.
As I explained before, XRI and XDI are cool technologies because they allow extensible, persistent, permissioned, granular connections between two data elements (like people). Now imagine if the unique identifiers for each data element could be resolved using a web browser by referring to a global registrar (like domain names) for each of these data elements. Essentially using simple syntax, you could define what elements about you any website in the world had access to. Cordance, along with Neustar (a giant registrar infrastructure company that runs among other things the .biz domain) has built this global registry.
Since Cordance is the defacto GSP for all XDI.org services, they are essentially the wholesale registrar (think Network Solutions) of high level XRIs (think names and companies). Cordance also authorizes iBrokers (think GoDaddy) to retail these high level XRIs. If you’ve followed the history of Network Solutions, you will understand this can be a pretty valuable business. VERY valuable in fact, IF web browsers spoke XRI/XDI by default (which they don’t).
If they did, however, not only would Drummond‘s patience with the technology finally pay off, it would hugely simplify building a powerful identity layer into the internet. More broadly, it would make it possible to build persistent, granular “trust contracts” that would make it MUCH easier for all of us (people and companies) to control what information we would like to share with each other.
As to whether this will ever happen is very much in the air. I hope, however, that by explaining how difficult it has been for Cordance to free the technology and yet still make enough money to provide a meaningful service, we can understand how difficult the “business model” problem for identity companies is going to be to crack. In my next (and final) post on iNames, I’ll write about the mysterious Ootao and its founder Andy Dale.